Ella 
The yen’s daily gains against the dollar narrowed as traders expect the Bank of Japan (BoJ) to announce its monetary policy decision on Wednesday. Investors speculate that the Bank of Japan is likely to keep its short-term interest rate target between 0% and 0.1% for a third consecutive meeting, after ending eight years of negative interest rates in March.
The Bank of Japan is likely to discuss whether to raise interest rates at its meeting this week. On Friday, Reuters quoted a source familiar with the central bank as saying that given the uncertain consumption outlook, “the chances of launching an interest rate hike are 50-50 and difficult to launch.” Another source said it was a judgment call as to whether to act now or later this year.
Additionally, the Bank of Japan is expected to scale back its massive Japanese government bond (JGB) purchase program of 6 trillion yen ($38.14 billion) per month, as it said at its June policy meeting.
The U.S. dollar (USD) faces challenges ahead of the Federal Reserve’s (Fed) interest rate decision on Wednesday. While the central bank is expected to keep interest rates on hold in July, market expectations for a rate cut by the Federal Reserve in September are growing. The speculation weighed on the dollar.
